Ethical Leadership in Business: How to Deal with Dilemmas

Remember Sherron Watkins? You might not. It’s been almost two decades since Watkins was the vice-president of corporate development at the disgraced Enron energy company, but today is most often referred to as its whistleblower. A certified public accountant with a master’s degree in professional accounting from the University of Texas, Watkins joined Enron after working for the poster child of accounting fraud, auditing firm Arthur Andersen, for eight years.

Why was the Enron financial scandal not exposed earlier? Why did it take years before a concerned employee came forward? Why did no one stop the “smartest guys” when the lights went out in California? Ms. Watkins cited four key factors that could be applied to many organizations and their employees:

  • fear of losing one’s job
  • fear of rocking the boat and being ridiculed
  • an “it’s not my concern” attitude
  • a “group think” culture that does not tolerate criticism of the corporate viewpoint

Fear, apathy and peer pressure. It sounds like high school. But how many employees, regulators, investors and others with links to today’s scandals are now saying, “if only I had shown some ethical leadership and done something”?

Who “Made Off” with the Money?

While the full story is not yet known—and experience tells us that it will take years to uncover all the facts—the sheer size of the fraud allegedly committed by Bernard Madoff, the American businessman and former chairman of the NASDAQ stock exchange, adds another layer to the general public’s mistrust and cynicism of the ethics of people in high places.

The Madoff case appears to be a Ponzi scheme of gigantic proportion but subtle variation. The structure of such schemes have been around for centuries but were made famous by the eponymous Charles Ponzi, who defrauded investors in the United States through fraudulent activity involving the exchange on international postal reply coupons. The classic Ponzi scheme is one in which the returns on investors’ funds are not obtained through actual earnings but from the principal contributed by subsequent investors. No legitimate investment exists, and the funding from subsequent investors is used to pay off earlier obligations, which provides the appearance of legitimacy.

Madoff’s scheme was typically Ponzian in structure, but varied in both pace and marketing. Bernard l. Madoff investment Securities offered its exclusive clientele modest but steady returns in both bull and bear markets, rather than the typical Ponzi paradigm of suspiciously high returns to all comers. Furthermore, charitable foundations, rather than individual investors, were many of Madoff’s victims, organizations that one would assume to be sufficiently sophisticated to see through all his smoke and mirrors.

Nevertheless, not only was the Madoff scheme typical in Ponzi structure (using new or annual investments as “returns” to established clients), it also shared a few other attributes. Madoff indicated to clients that the intricacies of his investment strategy were too complicated to explain in simple terms. Madoff also claimed that the secrecy of his strategy and investments was important. The “beauty” of the Madoff scheme, however, was in how it diverged from three key aspects of the traditional Ponzi:

  • Questionable or limited information on the background of the promoters of the investment
  • Promoters who are not registered with any securities regulator or self-regulatory organization
  • Obstructions to due diligence because of key offices or institutions in foreign jurisdictions

Mr. Madoff was an established investment veteran with impeccable credentials operating in plain sight in one of the foremost investment capitals in the world. In the end, who had the courage to come forward and blow the whistle? Not the regulators. Certainly not the investors, who were blinded by steady returns and a false front of legitimacy. It was instead the Sherron Watkins of Bernard l. Madoff investment Securities: Mark and Andrew Madoff, sons of Bernard.

Ethical Issues

One can only imagine the horror experienced by Watkins and the Madoff boys. To discover that fraud is occurring all around you is to be faced with an ethical dilemma that many would prefer to simply ignore. Though the ethical dilemma is personal (“should I blow the whistle?”) the ethical issue is institutional.

Ethical issues come in all shapes and sizes, and by no means are they all related to financial fraud. They can be legal or illegal. They can be simple or complex. Their consequences can be minor or severe. Some of the topical ethical issues that companies face today are:

  • affirmative action or preferential hiring programs
  • corporate donations to non-profit organizations
  • the outsourcing of jobs to countries where labour is less ex-pensive
  • the outsourcing of production to countries with looser environmental or health and safety laws
  • tax minimization strategies

Note that none of these practices are illegal. Indeed some, like affirmative action programs or outsourcing, become popular economic or social trends. Others, like corporate donations to non-profits or tax minimization strategies, are simply good business.

What they share, however, is the advantageous treatment of one group at the expense of another. They involve choice. And choice requires leadership. So how do people guide themselves in their choices when ethical roadmaps don’t exist and ethical issues are a moving tar-get? After all, ethics vary from person to person. Ethics vary from country to country. Ethics vary from culture to culture. It may help to take a step back for a moment and imagine a pyramid based on enforceability.

Ethical Enforceability

In most societies, the basic ethical standard is criminal law. We all agree that people should not break the law. But how many times have you heard that old saw, “if it ain’t illegal, it must be ethical”? Ethical behaviour is not enforceable law, because criminal law alone cannot encompass all ethical issues and therefore cannot enforce ethical behaviour. Yet criminal law—the entirety of the criminal code and its penalties—provides business with an ethical base.

The most difficult ethical dilemma is not about right versus wrong. It’s about right versus right. It’s about the right away to con-duct business, and if the dilemma is particularly tough, that’s usually because there are powerful ethical arguments on both sides. Too often, the scandals that make the headlines are the result of perfectly legal but appalling and outrageous behavior that highly offends the public. That’s why you need regulatory law. It’s the next level in the pyramid.

These are the regulations that govern industries and professions. They may be self-imposed or imposed by government in some form of regulatory agency. They exist not only to regulate the behaviour—typically through a disciplinary process—of organizations and individuals but also to serve as a framework that acts as a moral guide.

Here it may be useful to take note of CGA Ontario’s “Code of Ethical principles and rules of Conduct” (“the Code”), as a template of regulatory law. A professional organization and its members are granted the legal right by society to organize itself, to control en-trance into a profession and to formulate standards of behaviour governing its members. in return for this right, its members are to act in the interest of society and the public.

The Code encompasses both ethical principles and rules of conduct, and articulates the ethical obligations of all CGAs as well as desirable character traits and values that guide our ethical behaviour. It would be impossible to overestimate its importance in both the personal and professional life of every CGA. Without question, to be called upon by the chair of CGA Canada to rise and recite the Oath of Obligation at the Admission to Membership Ceremony is a profound experience, and an occasion no CGA ever forgets.

In this way, we might say that a framework of common behaviour—and the sanction that results when one betrays the trust of one’s colleagues—helps to regulate individuals to a degree to which organizations are immune. Thus the need for corporate policy.

Though corporate policy is typically less enforceable than criminal or regulatory law, it still informs ethical behaviour. The weakness of corporate policy, however, resides in its obligations: if a company’s main purpose is to maximize returns to its shareholders, then it could be seen as unethical for a company to consider the interests and rights of other groups. That is why many people believe that corporate policy primarily exists to limit legal liability or curry favour by presenting the image of the good corporate citizen. it is also why many believe that ethical problems are better dealt with by depending upon employees to use their own values as their guide.

The Behaviour Ladder shows that, while a corporate policy may be legal, it may still fall short of ethical behaviour, and be inconsistent with the values of employees. Similarly, even though ethical behaviour is both higher and dependent upon both criminal law and corporate policy, it may not mesh with individual values. Of course, the value system of many individuals is not consistent with the reality of every criminal law; nevertheless, if we are all to climb the ethical ladder, we need a common rung on which to begin.

Ethical Criteria

So how can you determine what is ethical? For example, if a new corporate marketing decision has been made with which you are uncomfortable, what tests can you apply to see where it stacks up on the ethical scale? Here are a few criteria that will help:

  • Is it legal? if the course of action is not legal, then it should not be done. Take steps to identify the illegality of the issue and ensure that you do not participate in its implementation.
  • Do the benefits exceed the cost, regardless of to whom they accrue? Ask yourself what the benefits are of the policy and to what extent do they outweigh the costs of the course of action. This may help you to identify who or what benefits from a specific decision.
  • Are you prepared to let everyone in your organization carry out the proposed action?
  • The Light of Day. Would you be comfortable if your actions were exposed both inside and outside your organization? (A variation of this is the parental test—would you be willing to tell your parents what you have done?)
  • The Golden Rule. What would you say if the proposed action were done to you? your own reaction may provide guidance as to whether the action is ethical.
  • The External Test. Discuss your proposed course of action with others. If feedback indicates that the proposed course of action is an ethical issue, think long and hard before proceeding.

The late Robert Noyce, legendary co-inventor of the microchip, once said, “if ethics are poor at the top, that behaviour is copied down through the organization.” While I admire the sentiment, I don’t completely agree with it. The fact is that in every organization there are employees who are whistleblowers in waiting. Remember Sherron Watkins? She wrote a detailed, no-holds-barred seven-page letter to her boss, Kenneth lay, telling him company was just a giant Ponzi scheme. And she was circumspect enough to take the external test before writing it—she discussed her ethical dilemma with her former partners at Arthur Andersen.

As long as there is business, there will be situations that test the ethics of business participants. But in the words of the financier Henry Kravis, who knew a thing or two about the ethics of building a business empire in the same city that spawned Bernard Madoff “if you build that foundation—both the moral and the ethical foundation—as well as the business foundation and the experience foundation, then the building won’t crumble.”

COVID-19 Pandemic Brings Surge in Online Puppy Scams Warns Better Business Bureau

Isolated people during the COVID-19 pandemic are being targeted by scammers for online puppy scams. COVID-19 Scams have been making news since March 2020 and it seems like there is no end to what fraudsters can come up with to take advantage of other people. The Better Business Review over Mainland British Columbia is warning Canadians of the recent spike in the number of online puppy scam reports.

Warnings Issued

The warning was issued by Better Business Bureau after they’ve received increased reports from consumer assistance organizations across the country. The reports say that more fraudulent pet websites were discovered in April 2020 compared to the total from the entire first quarter of the year.

BBB Mainland B.C. spokeswoman Karla Laird says that scammers are exploiting would-be-pet-owner’s desires of finding a puppy to help them cope during these trying times. She further shared that scam victims from Victoria to Toronto and Halifax have been reporting getting duped by fraudsters while trying to buy a puppy online.

In response to the above, the Better Business Bureau shared tips on how to avoid getting victimized by online puppy scams. They are as follows:

  • Do not buy a pet without seeing the pet in person
  • Do not buy a pet from non-established sellers
  • Avoid sending money prior to seeing the pet in person
  • Avoid payment methods such as gift cards, Moneygram, or Western Union as they are commonly used by fraudsters who do not want to be traced

Sophisticated Pet Scams Online

The Bureau found out in an earlier study that those who engage in online puppy scams and other successful scams rely on sophisticated advertisements to lure unsuspecting consumers. The advertisements make it seem that there is a legitimate business behind the ads, as the ads are sponsored content and usually lead to a seemingly well-crafted website. Experts estimate that as much as 80% of the sponsored ads that are about pets are fraudulent, according to the BBB.

How to Spot Online Pet Scams

An example of a fake pet ad and website is a website targeting people who wants to buy a Cavalier King Charles Spaniel. The website claims to be from Tulsa, Oklahoma and may seem legitimate at first glance, until one takes a deeper look. Legitimate sites will have an online history or footprint, with numerous links online and via social media as well as social media accounts that go back months if not years. If a website has only been active between February to May 2020, then it could be one of the fake websites specifically created to scam people while COVID-19 is around.

It is best to do a lot of research on an intended breed before adopting a dog, including pricing as well as specific breed illnesses. If a website is trying to sell a puppy too cheap or claims a 100% guarantee of no health issues; and interested to sell to whomever shows an interest, then the motives behind the sale may be less than ideal. Experts suggest looking up dogs in shelters as the pandemic caused quite a lot of healthy and purebred dogs to be surrendered. Such an adoption will be legitimate, there is no possibility of being scammed, and you get to meet your new dog in person.

Do you know someone who may have been a victim or was targeted for an online puppy scam? Our private investigation services can help uncover truths and verify if a website is legitimate or not. Contact us today and we’ll do our best to get our private investigators to work on your concern as soon as possible.

 

Deception in Financial Statements

In a recent case investigated by the Royal Canadian Mounted Police (RCMP), the senior executives of a publicly traded company were charged with fraud related to the financial statements of the company. The RCMP stated that the accused created an elaborate scheme of paper trails that exaggerated the financial position and the performance of the company in order to mislead investors, creditors and auditors. Revenues were overstated in successive quarters, false sales were recorded in the accounting records and high interest loans were not recorded.  The company eventually went into bankruptcy, at which point the deception was uncovered. Creditors and investors lost millions and employees suffered through unpaid wages.

Financial statement fraud is the deliberate misrepresentation of the financial condition of an enterprise. Its intent is to deceive financial statements users (e.g., shareholders, creditors, regulators). It has many forms and guises, but is perpetrated through intentional misstatements or omissions of amounts in financial statements. It occurs in large publicly traded companies. It occurs in small family-owned firms. CGAs should be aware of the red flags that may indicate the presence of financial statement fraud and then make the appropriate examination to determine if their concerns are warranted. It is often the small extra inquiry by an accounting professional that exposes the presence of financial statement fraud.

The extent of financial statement fraud varies but the techniques used to perpetrate it generally fall into the following categories:

  • fictitious revenues
  • fraudulent asset valuations
  • fraudulent timing differences
  • concealed liabilities and expenses
  • improper or fraudulent disclosures or omissions

Fictitious Revenues

Fictitious revenues are probably the most common form of financial statement fraud. In this scenario, false sales are recorded in the books and records of the company. Often, the offsetting entry will be to accounts receivable. However, there are also other methods of manipulating the revenue side of financial statements. Other techniques include the recording of consignment sales and sales with conditions, failing to record the return of goods sold, improper write-off of receivables, and non-recognition of sales discounts. All these techniques can have the effect of making revenues appear greater than they actually are.

Fraudulent Asset Valuations

Improper asset valuations can be used to manipulate financial statements to the point that they are misleading and fraudulent. This can be done in several ways. Often, an intentional violation in the application of the “Lower of Market or Cost Rule” has been done in order to manipulate the financial statements of an enterprise. Estimates of an asset’s residual value or useful life can also be manipulated. Other schemes to inflate current assets at the expense of long term assets can be undertaken in order to manipulate financial ratios.

Fraudulent Timing Differences

The misapplication of timing difference protocols in accounting can result in financial statements being manipulated. Essentially, timing differences can shift revenues from one reporting cycle to another. The same technique can be used to shift expenses. The result can be that expenses are either overstated or understated in a particular period. In the context of fraud, this technique allows the management of a company to manipulate earnings in order to hit predefined targets.

Concealed Liabilities and Expenses

Concealed liabilities and expenses can have significant impact on financial statements, because concealed amounts have a direct impact on the bottom line of a corporation. The pre-tax income is increased to the full amount by the expense that is not recorded. Concealing liabilities is often easier to do than inventing fictitious revenues, as the latter often requires the creation of false documentation such as false invoices or sales receipts. Concealing liabilities can be as simple as capitalizing an expenditure, rather than correctly placing the cost in the appropriate expense account. Another method is the understating of warranty costs for an enterprise. Failing to adequately disclose the true warranty expense for a business can be of benefit to corporate criminals who wish to manipulate financial statements.

Improper or Fraudulent Disclosures or Omissions

As a general rule, financial statements must contain all information to prevent a user of those financial statements from being misled. Notes to financial statements should contain narrative disclosures, supporting schedules, and any other information required to avoid misleading financial statement users. Improper or inadequate disclosure in financial statements can be any of the following:

  • accounting changes
  • liability omissions
  • management fraud
  • related party transaction
  • subsequent events

The degree of the lack of disclosure in any of these examples can amount to the fraudulent omission of a material fact that, in turn, makes the issuance of financial statements fraudulent.

The Defence Against Financial Statement Fraud

Financial statement fraud can be insidious and shrouded. It may have perpetrated for years in any particular business or organization without exposure. Often, when it is finally detected, it is too late; creditors, investors and shareholders have been victimized with no hope of recovery. How then, can we immunize ourselves from financial statement fraud?

The answer lies in a close examination of financial statements for any red flags that may emerge. Each of the types of financial statement fraud outlined in this article has its own red flag, but there are many common warning signs of financial statement fraud. (I recommend the Canadian edition of the Fraud Examiners’ Manual, published by the Association of Certified Fraud Examiners, for extensive reference.)

While I’ve grouped the examples into categories for the sake of simplicity, any one of these warning signs—sometimes alone, sometimes in combination with other signs—can be the key to the discovery of fraud.

Accounting and Statement Warning Signs

  • Negative cash flows while reporting positive earnings.
  • Rapid growth or unusual profitability.
  • Unusual and highly complex transactions, often close to year end.
  • Unusual changes in key financial ratios.
  • Unusual increases in gross margin.

Economic and Sector Warning Signs

  • Assets, liabilities and expenses based on significant estimates.
  • Declines in customer demand.
  • Increasing business failures in the sector.
  • Significant bank accounts or operations in tax haven jurisdictions.
  • Significant related-party transactions.
  • Rapid growth or unusual profitability.
  • Repeated use of materiality to justify inappropriate accounting entries.

Corporate Culture and Structural Warning Signs

  • Domination of management by a single person or small group.
  • Excessive participation by non-financial managers in accounting issues.
  • Formal or informal restrictions on the auditor that limit access to key persons.
  • Ineffective communication and implementation of company’s values and ethical standards.
  • Ineffective or weak board of directors and audit committee.
  • Known history of violations of securities laws by the company, related entities and its executives or board members.
  • Overly complex organizational structure involving unusual entities.

CGAs should be aware of the basic types of financial statement fraud and the red flags that mandate closer examination. This basic knowledge will help CGAs and their clients from falling victim to fraudsters who seek to deceive investors, creditors and others with materially false financial statements.

OPP Warns Canadians Not to Fall for New Online Health Scams Related to COVID-19

It has been weeks since the onset of the COVID-19 pandemic and it is not yet showing signs of slowing down anytime soon. And yet, members of the Ontario Provincial Police or the OPP Anti-Rackets Branch’s Health Fraud Investigation Unit (HFIU) is busier than ever, citing an increase in the number of health care related scams linked to COVID-19 as the reason. OPP Anti-Rackets HFIU says that the new COVID-19 scams are targeting unsuspecting innocent Canadians to extort money and personal information.

Warning to Ontario Residents

Ontario residents are warned by OPP Anti-Rackets HFIU that they need to be extra vigilant as a lot of new online COVID-19 scams are specifically trying to gather health information through ‘harvest’ sites. Fraudsters are designing the harvest sites to look like legitimate websites and then trick victims into providing their sensitive personal information.

Fake Health Websites

The newly created websites pose as virtual care websites that at first glance can seem like websites designed to provide convenient and proper healthcare services to people. The truth is, the fraudulent websites use sophisticated malware to harvest personal information from people that can later be used for fraudulent billing or healthcare services and identity theft. In some cases, the scammers are extorting money from victims or asking for an upfront fake administrative fee for nonexistent services.

Protect Yourself Against Online COVID-19 Scams

Scammers take advantage of people’s emotional responses and prevailing misinformation to manipulate unsuspecting individuals. The best way that you can protect yourself is to stay informed and to follow the guidelines below:

  • Be skeptical of companies claiming they got COVID-19 cure and guaranteed prevention
  • Ask a lot of questions before providing information such as your Ontario Health Card Number, version code, or other personal information
  • Refrain from downloading any attachments from unfamiliar websites or email
  • Know that it is possible that spoofed source can look like a legitimate website or email
  • Going to a physician’s office should not incur additional technical charges or surcharges for sanitizing cost and the like
  • Make sure to verify who is calling if a call is requesting for your personal information
  • Do not be afraid to say no to anyone who contacts you for your credit card information, bank account number, driver’s license number, health card version code, or any other personal identifying information
  • It is perfectly okay to end all communication or contact with individuals or companies who keep on asking for sensitive information over the phone during COVID-19

Should you need more advice and information to help you avoid COVID-19 scams, be sure to refer to the Ontario Ministry of Health coverage and information or contact your insurance provider especially if you have queries about your insurance coverage.

If you know someone or think that you’ve been targeted for a health care related scam, insurance scam, or any COVID-19 scam, feel free to contact the Canadian Anti-Fraud Centre or the police to report the possible fraud. If you need help to further protect yourself or to gather evidence for a report, contact us today at Haywood Hunt & Associates Inc. 

 

COVID-19 Insurance Scams to Watch Out For

COVID-19 scams are on the rise, including insurance scams. Although most of the country is either social distancing or are on lockdown, the fraud-fighting community is seeing a rise in the number of insurance fraud cases. The rise is very noticeable and is enough to prompt organizations to issue alerts for their consumers.

Playing with Vulnerabilities

As we face a health crisis, people are understandably more anxious and fearful regarding what the future may hold for them. Add to this the fact that a pandemic brings in a set of problems that institutions are not ready for, and it is easy to see how criminals would see the situation as an opportunity to commit fraud.

How does one recognize if something is fraudulent, then? National Insurance Crime Bureau Senior Vice President James Schweitzer says that if something sounds too good to be true, then something might be afoot. He adds that scammers are targeting people by appealing to the inherent desire for information and hope. Scammers send emails and post ads on social media that appeal to this human need and then ask for personal information such as Social Security Number, credit card information, and similar sensitive data. Victims may then get their identity stolen from them or used for illegal activities. Below are other COVID-19 scams to watch out for.

COVID-19 Insurance Scam

Bogus insurance agents are trying to mimic mainstream and legitimate companies and pitching to sell COVID-19 insurance. The Coalition Against Insurance Fraud urges people not to follow their links or entertain their calls as there is no insurance product that covers COVID-19 problems the way they are marketing it.

COVID-19 Car Insurance Scam

Even with minimal vehicles on the streets, scammers will find a way to purposely cause accidents to be able to file a claim against their own insurance or a target’s insurance. These staged accidents work for car insurance scam because social distancing means fewer witnesses as well as people not taking a closer look at fake injuries to avoid a possible infection with COVID-19.

COVID-19 Travel Insurance Scam

There is a proliferation of bogus travel insurance policies that claim coverage for trip cancellations related to COVID-19. Note that most travel insurance policies have no coverage for pandemics, so a COVID-19 coverage is an immediate red flag. A Cancel for Any Reason coverage or a CFAR is most often just a sales pitch and had to be purchased separately within strict limitations.

COVID-19 Phishing Scam or Spoofing Scam

Unsolicited emails that look like they are from legitimate companies and requesting for personal information are most likely bogus. So are messages from companies who claim to have access to cures, ventilators, COVID-19 diagnostic kits, and the like. It is best to not fill out any forms from such messages and to simply mark the message as spam.

Fraud is truly on the rise these days. It pays to be extra careful and read up on ongoing scams particularly the ones that the Canadian Anti-Fraud Centre warned about aside from the COVID-19 scams above. Exercise extra prudence more so with unsolicited communication too. If you think that you have been scammed or has been targeted by scammers, contact us to inquire about the ways that our private investigators can help you protect yourself using our private investigation services.

 

Millions of Coronavirus Scam Emails Are Being Blocked by Google Everyday

Google has been actively fighting off scam emails related to the COVID-19 pandemic and the latest report says the tech giant is blocking around 100 million coronavirus scam emails per day. The coronavirus emails are phishing attacks launched by scammers to collect data such as personal information from unsuspecting individuals. After collecting the information, the information will be used to hack accounts or to steal identities to commit more fraud.

Explosion of Phishing Attacks

Criminals are getting more creative and can even send emails that may seem like regular emails from banks, government offices, and billing companies. The latest scam email trend is to use the coronavirus pandemic as the email’s header to get people to click on an email and provide the information the scammers are looking for in order to commit fraud. It is estimated that there could be hundreds of millions of scam emails per day and Google is able to filter or block 100 million per day to protect the 1.5 billion people who are users of Gmail service.

Impersonation of the World Health Organization

What is particularly alarming is how the phishing emails would impersonate authorities and health agencies. A huge number of such emails are impersonating the World Health Organization to persuade people to donate to bogus causes or to download malware. Some emails sent by the cyber criminals imitate government institutions to capitalize on government support packages.

The Fight Against Fraudulent Email

Google is currently using their machine learning tools to block coronavirus phishing emails and they’ve been successful at blocking more than 99.9% of the emails from reaching their users. With this said, the emails are still around and increased significantly. In fact, several cyber security companies are currently looking into this and report that they’ve seen a 667% increase in phishing emails since the pandemic started.

Exploitation of Legitimate Fears and Concerns

Fraudulent emails could be from anywhere. There are some that are pretending to be from the UK government, some from those who are pretending to be from the CDC or Centre for Disease Control and Prevention, some that claim to be from specific politicians or world leaders, and some that claim to be from the World Health Organization. A rule of thumb for ignoring such emails is that if you are not signed up for an email service from a specific sender, then it is unlikely that they would have your contact details to send you emails.

No matter how important an email sounds like, if it is asking you to provide personal information, to download something on your device, or to log-in at an app or a website that you haven’t heard of, simply report the email as fraud and do not open any links on it. Remember that cyber criminals are banking on confusion, fear, and other emotional responses to try to get people to do what they want when they are most vulnerable.

Have you provided your information to a possible phishing email or downloaded a fake COVID-19 tracker app? Contact us today and we may be able to assist you to protect yourself with the help of our private investigation services. Not only can we help you avoid phishing scams in the future, but we can look at your internet fraud vulnerability and provide you with steps to protect yourself.

Spotting Phishing Scams Related to COVID-19

Not even an economy-stopping pandemic will stop fraudsters. As more nations feel the grip of the increasing health crisis, scammers are taking full advantage of the COVID-19 pandemic to send fake emails to people tricking hapless victims into clicking on malicious links or attachments and revealing their personal information.

COVID-19 Cyber Security Scam Alert

A COVID-19 phishing email looks like a normal email complete with authentic-looking logos and branding. They often use the World Health Organization’s branding or logos or use the same from other public or government health agencies. Know that phishing is not limited to email, as some fraudsters resort to calling Canadian homes with offers of fake laboratory testing or fraudulent requests for donations.

How to Avoid a COVID-19 Scam

Scammers will send emails that will attempt to get your personal information or install malware into your mobile device or computer. Some will look like a donation link designed to capture your credit card information. Take the following steps to avoid becoming a victim.

  • Practice skepticism. No matter how authentic looking an email may be, try to be more skeptic and nitpick details in the email. If the email contains email addresses, toll-free numbers, or website links, you can double check by using a known email address, website, or email of the organization to avoid clicking on fake links and contacting the scammers directly. If you want to verify some information, know that the right information will be posted on your provincial health agency’s website or the Public Health Agency of Canada website.
  • Always check the email address of the sender. Phishing emails use sender addresses or names that may look like the real thing, but if you hover on the sender’s name, the actual email doesn’t match the sender at all.
  • Avoid clicking on attachments or links. Embedded links in phishing emails seem valid, but the address it links to is definitely not. If the link address seems suspicious or does not seem connected to the highlighted text, there is a big possibility that it is a phishing email. If there are any attachments that aren’t expected or seem out of place, it might be infected with malware.
  • Be more vigilant. If an email is requesting for your financial information or personal data, that may be fake.
  • Make sure that your devices are protected. Installing anti-spam, anti-malware, anti-virus, and anti-spyware software can seem like being too cautious but you’ll be happy that you have them for protection in case of a possible attack.

What to do with a Phishing Email

You can’t avoid receiving phishing emails because they are everywhere. What you can do is either report them or delete/block them. You can report the email to the organization being spoofed so that they can issue the necessary warnings for other people. By blocking or deleting the email, you can save yourself some wasted time and headache down the road.

Aside from checking the Canadian Anti-Fraud Centre for a compiled list of COVID-19 scams, you can stay tuned in this blog for more news on COVID-19 fraud. You can also check the government of Canada approved information regarding COVID-19 at https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection.html. If you think that you may have been a victim of phishing or identity theft, do not hesitate to contact us. Our private investigators can help you with the necessary steps to protect yourself against phishing scams as well as gather data that you may need for an official police report using our private investigation services.

Brampton Man Arrested After Faking COVID-19 to Get Out of Work

A Brampton man faked having COVID-19 in order to get out of work. He has been charged after he falsely claimed contact with someone infected with the novel coronavirus earlier this week.

The Man Who Cried Corona

Peel police was contacted by a Brampton business owner around 9:15 a.m. Monday following an immediate shutdown after an employee claimed contact with a family member who is positive with COVID-19. After careful investigation, officers found out that the claim was a hoax orchestrated by the man to get off of work. To be clear, there is no one from the man’s family who was sick with the novel coronavirus or was exposed to it.

The Brampton man is 39-years-old and works at a small business. He was charged with public mischief and released on the promise that he will appear at a later scheduled date in a Brampton court.

More Fake COVID-19 Cases

This is not the first case of someone pretending to have COVID-19. A McDonald’s worker in Hamilton was charged after a fake positive COVID-19 test less than a week ago. Just last Friday, the 18-year-old woman faked a doctor’s note stating a confirmed positive COVID-19 result to not have to work at McDonald’s for her shift. The restaurant had to shut down as a result and people were also made to worry needlessly. She was charged with fraud under $5,000 as she made and used a forged document as well as mischief over $5,000 for causing the restaurant to shutdown operations.

Warning Against Faking a Coronavirus Infection

The world is facing serious health and economic threats from having to shutdown places in relation to the spread of COVID-19 infection. Once a person is suspected of having it, an immediate tracing of people he/she came in contact it will be done, using up already strained government resources. Places that he/she frequented will be disinfected and possibly shut down, causing a substantial loss in revenue plus spread of fear, panic, and worry.

The damages of a fake positive COVID-19 infection go beyond just money. A case of COVID-19 should not be treated as a joke as there are people who place their lives in danger and have lost their lives in the fight against it. It is not worth it to lose one’s job and face serious legal consequences just to get out of work for a day or a few days by faking a novel coronavirus infection.

Beware of Fake COVID-19 Claims

If you have heard that someone you know may be infected with COVID-19, it is best to stay calm and verify the information. Contacting the local authorities will help as well. If you know of any information that are related to the cases above, kindly contact 22 Division at 905-453-2121 ext.1233. Should you wish to leave information anonymously, contact Peel Crime Stoppers at 1-800-222-8477.

Are you a business owner who quickly needs to verify a claim of COVID-19 infection by your staff? Contact us at Haywood Hunt and we’ll see how we can help you avoid falling for fraud and possible COVID-19 scams with the use of our private investigation services.

 

Canadian Anti-Fraud Centre Warns of the Following Covid-19 Scams

Covid-19 seems to be everywhere and so are fraud attempts and scams that are related to it. It isn’t new that fraudsters typically take advantage of times when people are confused to create more mayhem and cash-in from fear. Creative fraudsters do not care about what happens tomorrow, they only care about benefitting themselves and will exploit any avenue to do so, even the outbreak of Covid-19.

Covid-19 Scams

The Canadian Anti-Fraud Centre and local police departments are warning people about the rise of fraudulent activity, particularly those that are related to Covid-19 which are spreading faster than the virus itself. The warning talks about fraudsters profiteering from consumer’s uncertainties, misinformation, and fears. Below is a list of Covid-19 related scams to watch out for.

Quick Covid-19 Tests

Note that testing for Covid-19 is only done by hospitals because they are the only ones authorized to do so. Beware of fake kits and swabbing procedures that are being sold for a premium.

Essential Products Hoarding and Selling

This activity has many faces. Some consumers have hoarded essential products to sell later at a much-inflated cost. Some people are taking advantage of consumers who are stocking up by knowingly selling fraudulent or expired products at a bargain. There are people selling products that they claim can ward off the virus or provide a miracle cure. Even U.S. Federal agencies have warned the public about this and government agencies are clarifying that no such product exists yet.  And lastly, some scam artists create ads selling products that do not exist and they do not intend to send once payment has been made. It is best to be wary of products that are priced too high or too low or are promising results that are too good to be true.

Fake Anti-Covid-19 Filters and Cleaning Services

Believe it or not, some scheming heating and cleaning companies came up with fake services that offer Covid-19 filters and other similar claims just to drum up business.

Fake Calls About Hydro/Power Disconnection

Fraudulent individuals started making calls to people claiming their hydro or power could be disconnected if they do not pay them or agree to a special deal, claiming that the victim is behind with his/her bills.

Fraudulent CDC and WHO People

The World Health Organization and Centers for Disease Control and Prevention will never offer to sell access to a list of infected people nor offer tests for sale.

False Calls from Public Health Agency of Canada

Fraudsters are pretending to be from Public Health Agency of Canada and calling people to tell them that they’ve tested positive for Covid-19; and that to get access to a prescription and treatment, they will have to comply with providing their credit card and health card numbers.

Phishing Emails from Fake Government Agencies

Some scam artists are sending phishing emails that look like they are from government agencies. The emails are asking for personal details such as financial details and other sensitive data.

This list just contains some of the most common scams that are related to Covid-19. Know that anything that could be too good to be true and cannot be verified through reliable sources are likely to be scams or misinformation. If you’ve fallen victim to what you think may be a Covid-19 scam, be sure to report to the proper authorities. You may also contact us at Haywood Hunt to avail of our private investigation services. We can help you verify information and help you put up safeguards against scams, Covid-19 related or not.

 

Prevent Yourself from Falling Victim to Mortgage Fraud

Real estate fraud has been seeing an increase in incidences lately. Be it title fraud or mortgage fraud, it seems that more people are falling victim to real estate fraud and it’s about time people arm themselves with information for better awareness.

What is Mortgage Fraud?

Mortgage fraud is when a person intentionally provides incomplete or fake information to a lender to be granted a mortgage that the person may not otherwise qualify for. It can be committed by someone by falsifying appraisal of a property or by claiming to have higher income than what is the reality.

What is Title Fraud?

Title fraud is committed when someone else poses as the homeowner and tries to sell the home or to get a mortgage using a fake title. Basically, entering into any transaction using false identity and/or false title is title fraud.

Real Estate Fraud in Canada       

Mortgage fraud and title fraud are crimes that affect the banking industry, government, and law enforcement. Although there is no central organization that records or collects data nationally, real estate fraud in Canada is taken very seriously by the sectors involved. Note that the majority of the hundreds of billions of dollars in mortgage value across Canada are normal but still, this has taken the attention of involved sectors and measures are being taken to prevent real estate fraud as well as protect people from falling victim to it.

Protection from Real Estate Fraud

Banks are constantly working to protect people against all types of fraud. Most banks have security teams that are working 24/7 enhancing security, upgrading technology, and implementing plans to prevent fraud from occurring. The security teams also keep a record of data to assist the police with investigations if ever criminal activity is detected. Aside from this, banks work together with the Canadian Bankers Association to combat real estate fraud across the country and have task forces cooperating with the government, real estate groups, the police, private investigators, lenders, and lawyers in order to find out how real estate fraud cases can be prevented so that Canadians can be more protected against it.

Protecting Yourself from Real Estate Fraud

The good news is that you can do so much to protect yourself against this type of fraud by implementing the following:

  • Guard your personal information and do not disclose them over the phone, email, or to people you do not know.
  • Check your billing information and mail. Be sure to follow up if certain mails stop arriving.
  • Make sure items that carry your personal information are kept safe or if needing to be disposed, destroyed to render your information not readable.
  • Check your credit report for discrepancies.
  • Ensure that your home is in your name by checking the registry.

Do not worry about how banks are protecting themselves because they have private investigators to help safeguard their processes and data. Focus on how you can protect yourself from fraud and the actions that you can do if you suspect that you’ve fallen victim for one. If you need help uncovering information, feel free to contact us to avail of our private investigation services. We can do more than just investigate at Haywood Hunt, we can also help you initiate practices and put up protective barriers so that you can prevent yourself from falling victim to mortgage fraud.